Chapter 02 · Section 2.1

Xerox stock

Xerox common stock is trading at $64.00. What was the total premium received by a CBOE trader who wrote 3 July 70 Xerox puts at $7? N.B. CBOE stands for Chicago Board Option Exchange. Please enter the appropriate dollar amount.

a) +2100
• b) -7
  No. $7 is the premium per July 70 Xerox put share. The contract size of the listed stock options on CBOE is 100 shares of the underlying security, and 3 put options were written.
  c) -21
  d) -700

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